Texas Instruments Shares Tumble 4.32% on $2.11B Surge as Demand Slows Post-Tariff Spike, CFO Flags Mixed Recovery Gains

Texas Instruments (TXN) fell 4.32% on Thursday as trading volume surged to $2.11 billion, a 53.57% increase from the prior day. The decline followed remarks from CFO Rafael Lizardi at the Citi Global TMT Conference, where he confirmed a demand slowdown after a temporary spike in April driven by customer orders placed ahead of the Trump administration’s "Liberation Day" tariff announcement. Lizardi noted that January-to-April demand was partially fueled by anticipation of the April 2 tariff but emphasized that growth has since normalized. The company reiterated that four of its five end markets are recovering, though automotive demand remains constrained by sector-specific challenges and macroeconomic uncertainty.

Lizardi also addressed concerns about government equity stakes in semiconductor firms, clarifying that TI has not been approached regarding such arrangements under the CHIPS Act. This came amid broader industry scrutiny following the Trump administration’s 9.9% equity stake in Intel. TI’s $1.6 billion CHIPS Act funding package, negotiated with both the Biden and Trump administrations, has seen only minor adjustments, with no material changes to its structure. The CFO further highlighted ongoing pressure on free cash flow from elevated capital expenditures, which have slowed share repurchase programs.

Investor sentiment was further dampened by TI’s July profit forecast, which indicated weaker-than-expected analog chip demand from certain clients. While the company maintains a cautious optimism about market recovery, the sell-off reflects heightened sensitivity to macroeconomic risks and sector-specific headwinds. The U.S. Commerce Department’s tariff exemption for domestic chipmakers like TI has provided some relief, but near-term growth remains contingent on broader economic conditions and sectoral demand trends.

Historical data shows Texas Instruments’s shares have experienced 14 moves exceeding 5% in the past year. A 4.8% gain in late August followed reports of planned price hikes on 10,000–20,000 products, signaling margin-focused strategy shifts. Despite a 15.1% decline from its 52-week high, the stock has gained 0.5% year-to-date, with a $1,000 investment in 2020 now valued at $1,337.